Loan Assignment | Professional Writing
Michael is shopping for a special automobile. He finds the exact car he wants, a 1966 dark blue Pontiac GTO. This car is currently the property of a neighbor, so to buy it for theagreed-upon price of $50000 Michael must secure his own financing. He visits four different financial institutions and gets the following available loans:
Bank 1: 36 monthly payments of $1,619.23
Bank 2: 72 monthly payments of $926.29
Bank 3: 260 weekly payments of $247.38 (Assume a 52-week year.)
Bank 4: 16 quarterly payments of $3,886.05
Which loan should Michael take? Hint: Which loan has the lowest EAR?
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